- In response to investor pressure, companies have come under intense scrutiny to close their gender pay gaps; but three of 50 major U.S. companies – Starbucks, Mastercard, and Citigroup – received an "A" grade on the Gender Pay Scorecard (GPS) released March 31 in recognition of Equal Pay Day. Half of the top companies graded received an "F" including AT&T, Goldman Sachs, McDonalds and Walmart.
- Arjuna Capital, an investment firm, and Proxy Impact, a shareholder-advocacy and proxy voting service, compiled the third annual GPS that ranked companies’ accounting of current pay disclosures, their performance and commitments to close the pay gap, according to the report. Those that received an "A" grade showed leadership in these areas.
- The companies on the scorecard are engaged by shareholders within four industry sectors: finance, technology/communications, consumer and healthcare. They were asked by investors through the shareholder proposal process to improve their public pay equity disclosures, according to Arjuna Capital and Proxy Impact. "And while this is not a complete list of all corporations that have disclosed or have been asked to disclose their gender and racial pay gaps, it is a template through which to view corporate best practice," the report stated.
Equal Pay Day recognizes how far into the year the average woman must work to earn what a man earned in the previous year, as measured by the unadjusted "median gender pay gap." Throughout the year, there are also observances of Equal Pay Day for women of color. Pay transparency could be the most effective solution to closing the gender pay gap, but it must align with company culture, say experts.
"It's a cornerstone of many parts of our culture," Alex Haimann, partner and head of business development at Less Annoying CRM, a startup software company based in St. Louis, told HR Dive in March. "I would go so far as saying that if an organization wants to implement pay transparency… they critically need to also have an air towards transparency in other parts of how the culture is set, how rules are made, how decisions are made."
Research also has shown the effectiveness of pay transparency. A PayScale, Inc. report released in January found that transparent pay policies neutralized the gender pay gap between men and women holding the same position across most jobs. "Women are estimated to earn between $1 and $1.01 for every dollar a man earns in 2019 for organizations that have enacted transparent pay practices," according to the report. In fact, millennial women in a transparent pay work environment earn slightly more ($1.02) than other generations.
Although companies are aware of the effectiveness of pay transparency, many still have not made the commitment to bring it to fruition. A study by WorldatWork and Mercer published in February found that 67% of organizations surveyed said pay transparency is increasingly important. However, 14% of organizations have dealt with pay transparency beyond a "moderate" level. The survey of 478 respondents also found that 4% have nonexistent approaches to pay transparency, 35% have minimal and 1% have extreme transparency.
It’s estimated that closing the gender pay gap could boost the economies of the Organization for Economic Cooperation and Development countries by $2 trillion annually, according to PwC’s 2020 Women in Work Index.